REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

21/09/2020 17:25

The information contained in this release was correct as at 31 August 2020. 
Information on the Company’s up to date net asset values can be found on the
London Stock Exchange Website at:

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. 

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 August 2020 and unaudited.
Performance at month end is calculated on a cum income basis

                      One     Three     One    Three     Five  
                    Month    months    year    years    years  
                         %         %       %        %        % 
 Net asset value       6.4      10.8     5.5     20.5     73.5 
 Share price           8.6      12.2     9.5     47.5    103.9 
 Benchmark*            6.3       9.9    -0.2     -6.7     17.6 

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index replaced the Numis Smaller Companies
excluding AIM (excluding Investment Companies) Index as the Company’s
benchmark. The performance of the indices have been blended to reflect this.

 At month end                                                                  
 Net asset value capital only:                                         605.16p 
 Net asset value incl. income:                                         608.74p 
 Share price                                                           619.00p 
 Premium to cum income NAV                                                1.7% 
 Net yield (1):                                                           1.7% 
 Total Gross assets (2):                                               £510.6m 
 Net market exposure as a % of net asset value (3):                     118.5% 
 Ordinary shares in issue (4):                                      83,883,462 
 2019 ongoing charges (excluding performance fees) (5,6):                 0.6% 
 2019 ongoing charges ratio (including performance fees) (5,6,7):         1.8% 

1. Calculated using the 2020 interim dividend declared on 23 July 2020 and
paid on 26 August 2020, together with the 2019 final dividend declared on 06
February 2020 and paid on 27 March 2020.

2. Includes current year revenue and excludes gross exposure through contracts
for difference.

3. Long exposure less short exposure as a percentage of net asset value.

4. Excluding 0 shares held in treasury.

5. Calculated as a percentage of average net assets and using expenses,
excluding performance fees and interest costs for the year ended 30 November
2019.

6. With effect from 1 August 2017 the base management fee was reduced from
0.70% to 0.35% of gross assets per annum.

7. Effective 1st December 2017 the annual performance fee is calculated using
performance data on an annualised rolling two year basis (previously, one
year) and the maximum annual performance fee payable is effectively reduced to
0.90% of two year rolling average month end gross assets (from 1% of average
annual gross assets over one year). Additionally, the Company now accrues this
fee at a rate of 15% of outperformance (previously 10%). The maximum annual
total management fees (comprising the base management fee of 0.35% and a
potential performance fee of 0.90%) are therefore 1.25% of average month end
gross assets on a two-year rolling basis (from 1.70% of average annual gross
assets).

 Sector Weightings         % of Total Assets 
                                             
 Industrials                            31.2 
 Financials                             20.7 
 Consumer Services                      19.7 
 Technology                             10.6 
 Consumer Goods                          7.9 
 Health Care                             6.0 
 Telecommunications                      2.5 
 Basic Materials                         2.5 
 Oil & Gas                               0.4 
 Net current liabilities                -1.5 
                                       ----- 
 Total                                 100.0 
                                       ===== 
                                             
 Country Weightings        % of Total Assets 
                                             
 United Kingdom                         87.6 
 United States                           6.9 
 France                                  1.8 
 Australia                               1.1 
 Switzerland                             0.8 
 Netherlands                             0.8 
 Denmark                                 0.4 
 Ireland                                 0.4 
 Israel                                  0.2 
                                       ----- 
 Total                                 100.0 
                                       ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  30.11.19   29.02.20   31.05.20   31.08.20  
                          %          %          %          % 
 Long                 103.2      119.3      118.6      121.0 
 Short                  7.4        8.9        2.1        2.4 
 Gross exposure       110.6      128.2      120.7      123.4 
 Net exposure          95.8      110.4      116.6      118.6 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 YouGov                                       3.1 
 Breedon                                      2.7 
 IntegraFin                                   2.6 
 Dechra Pharmaceuticals                       2.5 
 Gamma Communications                         2.5 
 Avon Rubber                                  2.4 
 Learning Technologies                        2.3 
 Watches of Switzerland                       2.3 
 Games Workshop                               2.3 
 Quinteq Group                                2.1 

Commenting on the markets, Dan Whitestone, representing the Investment Manager
noted:

During the month the Company returned 6.4%(1) (net of fees), outperforming our
benchmark, the Numis Smaller Companies plus AIM (excluding Investment
Companies) Index, which returned 6.3%(1). Performance during the month was
generated by the long book, while the short book moderately detracted
reflecting the strength of the market.

Markets around the world rose during August as expectations for further US
fiscal stimulus, improving US/China trade developments and hopes for a
COVID-19 vaccine helped drive investor risk appetite. Despite flare-ups of
virus cases throughout Europe, and high levels of cases in a number of US
states, economic activity across the globe has shown signs of improving.
However, the re-imposed lockdowns in various countries, including Spain, Italy
and Greece serves as a reminder that the situation remains highly vulnerable
to setbacks if cases of the virus are not contained.

The largest contributor to performance was YouGov, the UK online marketing and
data analytics business, which rose strongly through the month after a robust
trading update on the 31 July 2020. YouGov continues to be encouraged by the
market share opportunities that have emerged as a result of COVID-19 as their
customers prioritise digital services and capabilities. Watches of Switzerland
delivered an impressive update growing revenues in both June and July
revealing the strength of their supply-driven business model. Grafton reported
strong first half trading with significant upgrades to forward guidance.
Profits and cash generation have been better than expected and the improving
trading environment led management to guide to profits in the second half of
the year to be flat year-on-year, which we think is encouraging.

The biggest detractor was from our long position in Serco, which fell after a
cautious outlook statement provided with their interim results prompted
analysts to downgrade their earnings forecasts. We have reduced our position
size as a precautionary measure. One of our short positions in a UK funeral
services business rose sharply (therefore detracting from relative
performance) on the news that the CMA (Competition and Markets Authority) has
decided to postpone the implementation of price controls given the current
market conditions. Whilst the issue hasn’t gone away, it does afford this
highly indebted company some breathing space. One of our US holdings, Chegg,
gave back some of its recent strong share price gains, despite no stock
specific negative newsflow, and therefore our investment thesis for the
business remains unchanged.

Overall August was another positive month for the Company, and once again the
result highlights some very encouraging stock specific updates from our
holdings. We continue to see evidence in company updates and speaking with
management teams that many differentiated growth companies can continue to
deliver updates that far exceed bullish sell and buyside expectations. The
level of dispersion of financial performance across many industries and
companies that this crisis has created is incredibly exciting, and the Company
remains well placed to capitalise on the opportunities that we believe will
continue to present themselves. We thank shareholders for their ongoing
support.

(1)Source: BlackRock as at 31 August 2020

21 September 2020

ENDS

Latest information is available by typing www.blackrock.com/uk/thrg on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3
(ICV terminal).  Neither the contents of the Manager’s website nor the
contents of any website accessible from hyperlinks on the Manager’s website
(or any other website) is incorporated into, or forms part of, this
announcement.



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